A Bahamas registered corporation has been named as a defendant in a lawsuit over an alleged “massive international Ponzi scheme” that defrauded global investors of more than $70 million, The Tribune can reveal.
Documents released by the Securities Exchange Commission (SEC) reveal that Vavasseur Corporation, e Bahamas-registered entity that is named as a defendant in an action being brought by the US securities regulator in the Western District of Virginia, allegedly ran a trading programme involving the selling of securities to investors, which raised more than $70 million.
However, the SEC action alleges that the ‘prime bank’ securities offered for sale through Vavasseur, which promised risk=free returns of 4% per week for 40 weeks per year, were “fictitious”.
An SEC release issued on June 10, 2002, said James Michael, a senior US district judge for the western district of Virginia, had entered a “permanent injunction order” against the alleged mastermind of the $70 million Ponzi scheme, US financier Terry Dowdell.
The SEC said, “The scheme raised more than $70 million from investors in the US and abroad through the sale of securities in a trading programme purportedly being operated by Vavasseur Corporation, a Bahamian company which is also a defendant in the lawsuit. In a Consent and stipulation filed in conjunction with the entry of a permanent injunction order, Dowdell has now admitted to the fraud.
“As is alleged in the SEC complaint, Dowdell offered and sold, through various promoters and marketers in the US and abroad, fictitious ‘prime bank’ securities purportedly involving the purchase and sale of foreign bank trading instruments such as medium-term debentures.
“Dowdell and his promoters represented that his trading programme would provide virtually risk-free returns of 4% per week for 40 weeks per year, up to 160% per year. A Dowdell admitted in his Consent and Stipulation, there was no actual trading programme. Instead Dowdell was operating a classic Ponzi scheme in which old investors were being paid with new investors money.”
